Raw sugar price at 4.5-year high! Know the reason - why to focus on sugar stocks

In conversation with Anil Singhvi, Managing Editor at Zee Business, Ashish Chaturvedi, Research Analyst explained the reason behind the actions in the sugar stock.

Chaturvedi said that the price of raw sugar is 4.5 years high. The price of raw sugar in the United States (US) has surpassed 20 Dollars.

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Explaining the reasons behind the same the research analyst said that there are concerns over energy crisis all over the world and its cost is increasing, especially in Brazil.

He said that it was informed earlier as well that Brazil was affected with draught, then frost and the produces also got spoiled because of which you can see that production is decreasing and now the demand is back to the pre-pandemic level but the supply has not yet been restored completely.

In such situations it is obvious that the cost and expenses will rise, he said. The analyst added that stocks of sugar companies can be in focus as the price of sugar is rising.

He said that Brazil, which is the largest producer of ethanol in the world, has an oil and gas company named Petrobras is saying that ethanol prices can increase by 7 percent. So, it can also impact the Indian market and the Indian companies involved in the business of ethanol can be in focus, the analyst said.

He added that if the rates rise in India as well then it can be a game-changer for the companies.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)